When Andy Haldane was the Bank of England’s chief economist he kept a keen eye on economic sentiment.
Under his watch, the Bank experimented with a number of ways to feed sentiment analysis into the hard data that served as the life blood of the central bank’s forecasting and decision making. Early AI tools were used to aggregate the underlying tone of analyst notes and research papers, while Haldane even raised the prospect of analysing the nation’s Spotify song choices to get a fix on the mood of the public.
What might he make of the fact that Linkin Park’s The Emptiness Machine (“You cut me open, just to watch me bleed”) has climbed near the top of the UK download charts this week? Three weeks ago, this column suggested that “Labour’s miserable mood music comes with its own risks” – and last week, Haldane told Sky News that Labour’s incessant talk of a “black hole” and “painful decisions” has been a mistake, one which has “generated a fear and foreboding and uncertainty among consumers, among businesses, among investors.”
Haldane, now chief executive of the RSA, remains incredibly well plugged in and switched on, so his concerns should be taken seriously, but there is no shortage of data to justify the anxieties of those who don’t like what they’re hearing. And while he was talking more about what some people call “the real economy” it remains the case that the vanguard of any great shift in activity will be made up of internationally mobile high net worth and ultra high net worth individuals.
Over the weekend it emerged that 60 per cent of EY’s asset management clients have asked the firm to undertake work on shifting their domicile out of Britain. City A.M. has also revealed that more than two-thirds of people with non-dom tax status are planning to leave the country, and in private equity circles the only topic of conversation is how quickly people can run for the (Swiss) hills.
Labour ministers, and even large parts of the public, might not shed a tear over the loss of these remote, almost abstract, purveyors of high-end financial services, but they should. Their loss would be tangible, not just symbolic, and there is a real risk it would mark the start of a substantial deterioration of the UK’s status.